Welcome to the North East
Regional Defence and Security Cluster.
Driving opportunity and innovation for North East SMEs.
The Northeast Regional Defence and Security Cluster is a groundbreaking initiative established
to be a focal point for the sector, helping to drive collaboration, innovation and opportunity.
The Regional Picture
900 employments
In the North East are supported
by MOD expenditure
1 in 20 adults
in the North East have served
in the armed forces
Above average
concentration
of firms in the wider defence and security
sector in the North East
Half a billion
Innovate UK Grant funding
received by North East defence
and security firms since 2002
About
UK Government has committed to substantial investment in the security & defence sector and the development of regional clusters was a key output of the SME action plan highlighted in 'The Defence and Security Industrial Strategy (DSIS), 2019. This strategy set out the government's vision for the defence and security sector in the UK.
Supported by the Ministry of Defence (MOD), regional defence and security clusters aim 'to invigorate the Defence Industrial base by facilitating industry, Academia and government sharing ideas, promoting collaboration and identifying routes to market through exploitation and commercialisation'.
Due to be operational in Spring 2024, the North East Regional Defence and Security Cluster will fulfil these functions for the North East region. A Steering Group is currently developing the cluster’s value proposition and membership model. The Steering Group will be supported by a wider advisory group consisting of SMEs, Primes, regional bodies and academia.
Steering Group
The Northeast Cluster is supported by major defence and security companies, including Leonardo, Lockheed Martin, QinetiQ, Airbus, and VRAI, NERDSC seeks to generate intellectual property, boost regional productivity, and create high-quality jobs.
Backed by the Ministry of Defence, Defence and Security Accelerator (DASA), and other local stakeholders, NERDSC is strategically focused on attracting investment, securing defence contracts for local firms, and supporting SMEs.
The Sector
National Context
The Defence and Security Industrial Strategy (DSIS) sets out the government's vision for the defence and security sector in the UK. The DSIS report highlights the importance of smaller suppliers' ability to deliver innovation and develop solutions against a changing threat and international security landscape. This plan builds on the priorities set out in DSIS, the Integrated Review, and the Defence Command Paper.
The Defence and Security Accelerator (DASA), which finds and funds innovative ideas for the benefit of national security, has consistently found that at least 50% of the scientific and technical ideas which it assesses to be desirable, feasible and viable come from SMEs. SMEs bring a unique customer focus and agility that adds value throughout the defence supply chain. In 2019-20 they contributed work worth over £4.5-billion [footnote 1] to defence projects, accounting for over 21% of Defence's total spend with industry.
Regional Picture
An evidence base to help shape the development of the cluster has been developed by the North East Local Enterprise Partnership (North East LEP). It provides the cluster members with an up to date understanding of the economic impact of defence and security in the North East region. The evidence on this cluster was generated in July and August 2023 in support of the cluster launch and was up to date at that point.
This evidence can be used by regional and national business and policy makers to understand the current strengths and opportunities related to defence and security in the region.
To see more background the sector please visit NE Evidence Hub.
The Highlights
Defence expenditure:
Of the total £45.9 bn expenditure, the North East region has received a relatively small amount of the Ministry of Defence's (MOD) expenditure (only 0.8%) with industry and commerce,
with the total amount of funding decreasing over time at a greater rate than national expenditure.
This suggests North East firms are either not biding for, not winning, or winning smaller contracts from the MOD than previously and compared to other regions
Defence employment:
This has led to a 41% fall in the number of employments in the region supported through MOD expenditure since 2013/14. 1,000 employments were supported through MOD spending in 2020/21
Contract size:
MOD spending in the region is tilted towards SMEs compared to the national average.
The proportion of SME's may partly explain the low spend in the region
Strengths in Computing:
MOD spending in the North East is also disproportionately focused on computing, reflecting the region's strengths in digital technologies and cyber security
Potential talent pool:
The North East region has a the highest proportion of the adult population having previously served in the UK - 1 in 20 people aged over 16.
This translates to around 110,000 people who have previously served, leaving the region for their service but returning soon after.
The forces play a key role in upskilling the region's workforce.
Innovation:
In the latest year that evidence is available, the defence and security sector accounted for 3% of the UK Governments' £66 billion investment in Research & Development and had grown substantially over the previous two years.
There is also evidence that the private defence and security sector is a significant contributor to R&D in the North East with firms having won £563 million in Innovate UK funding since 2002.
This accounts for approximately 43% of Innovate UK funding in the region over the same period.
Research Excellence:
The North East region has considerable innovation capacity and research expertise to further promote innovation in defence and security, and therefore create the conditions for future sector growth.
The region's five universities have a range of research strengths across physical sciences, computing, and chemistry.
STEM
The five regional universities also ensure that the region has a highly skilled workforce and with expertise in physical and related sciences.
In 2021/22 there were over 20,000 students studying STEM subjects in North East and a further 8,000 in computing.
Most students studying in the region remain in the North East for work bringing their skills to local businesses and employers.